THE SEC IS INVESTIGATING VALEANT AND THE STOCK IS TANKING

J. Michael Pearson, chairman of the board and CEO of Valeant. REUTERS/Christinne Muschi The US Securities and Exchange Commission (SEC) is investigating Valeant Pharmaceuticals. The stock fell as much as 20% after the announcement.

In response to media inquiries, Valeant confirmed that it has several ongoing investigations, including investigations by the US Attorney's Offices for Massachusetts and the Southern District of New York, the SEC, and Congress. With respect to the SEC investigation the Company confirmed that it received a subpoena from the SEC in the fourth quarter of 2015 and, in the normal course, would have included this disclosure in its 2015 10-K. We do not have further detail to provide at this time.

This is a new SEC investigation, separate from one into Valeant's acquisition of drugmaker Salix.

Since October

Valeant stock has been a Wall Street scalp-taker since October, when accusations of malfeasance from a short seller and government scrutiny over its drug-pricing practices sent the stock crashing.

Through all the drama, Valeant had disclosed its secret relationship with a special distributor, the pharmacy Philidor, that it had the option to purchase. Valeant shut Philidor down because of potentially shady practices, and has had to reinvent itself.

In December, CEO J. Michael Pearson announced that the company's strategy would change. It would no longer use acquisitions to grow, buying drugs and then hiking up their prices. Instead, he said, it would depend on volume. Valeant then entered into a new agreement with Walgreens.

But Wall Street doesn't have that much faith in the new Valeant — for reasons that have as much to do with transparency as turning a profit.

It will be waiting for answers on this new SEC investigation, and it won't be waiting patiently.